Volkswagen ABS Said to Be Cut From Bank of France Offer Listby
Bonds tied to VW loans removed amid emissions-testing scandal
French central bank is buying asset-backed debt in ECB program
The Bank of France removed two notes secured by Volkswagen AG auto loans from a list of asset-backed debt it’s seeking to buy, according to two people familiar with the matter.
The Volkswagen-related securities weren’t in an updated list distributed on Friday after being included in the original version sent to investors earlier this week, said the people, who asked not to be identified because they aren’t authorized to discuss the matter publicly. One of two bonds backed by Credit Agricole SA consumer loans was also removed, they said.
The elimination of the Volkswagen notes comes amid an emissions-testing scandal that may threaten the resale value of the German automaker’s vehicles. Volkswagen’s admission that it duped U.S. regulators has also led to the departure of its chief executive officer, as well as price slumps for its bonds and shares.
A Bank of France official declined to comment on the purchase-offer list. The Friday update also included two notes tied to Credit Foncier de France SA mortgages, one of which was changed from the earlier version, the people said.
Volkswagen Financial Services has 22.8 billion euros ($25 billion) of outstanding asset-backed debt, according to a September presentation on its website. Marc Siedler, a spokesman for the finance unit, declined to comment in an e-mailed statement.
The Bank of France cut the total amount of bonds it’s seeking to buy to as much as 131 million euros from as much as 235 million euros, according to documents obtained by Bloomberg News. The deadline for noteholders to submit offers to sell was pushed back by five days to 3:30 p.m. London time on Sept. 30.
The Paris-based institution is buying asset-backed securities under a European Central Bank purchase program, which is designed to help boost lending in the euro area. It has taken on responsibility for buying debt in more jurisdictions after getting an expanded role this week.